This seems to be catching on. Some towns use money called 'hours' where each is worth 10 dollars. It keeps spending within one's community. Is this a legitimate solution to the inflationary fed notes?

Not as they're currently designed and implemented. Regardless of the "hours" designation, their values are pegged to fed notes and they behave more like gift certificate coupons than anything.

Typically, local currencies, like Berkshares, Ithaca Hours, etc., and those based on a "LETS" system fix the price of an "hour" (of labor) arbitrarily at $10, as if that was an universal price for labor, which is a fatal flaw for a number of reasons. All have varying levels of acceptance and success. Not all merchants honor them, and those that do usually only honor them as partial payment for goods and services. You can't just go into a store and pay with nothing but the local currency in most cases. Their continued exchange values are based on promises and trust, with no way of tracking, backing or maintaining that exchange value in any meaningful way that assures that people the fundamentals are sound enough for people to continue to want to honor them.

I am extremely encouraged by the rise of local/parallel/alternate currencies, however, for a number of reasons. For one, it gets people used to the fact that they are legal, legitimate, and can even exist. They also get across the idea that their currencies are "complimentary" alternative currencies, and avoid the problems associated with being perceived as "competition" to the fiat currency monopoly of the Fed system.

Secondly, their existence is generally supported by people across a broad political spectrum (everyone generally likes and supports the idea of "local" control). That's very important. Thirdly, and very important, their recent rise has set precedences on state and federal levels that give more sophisticated local currencies a foot in the door.

One of the worst things that can happen to a currency, I think, is that it gets thought of as a "Tea Party" solution for libertarian or survivalist nutjobs only. Lose local political support and acceptance, and you might as well not even try, IMO.

Privately issued scrip was ubiquitous in the wake of the Great Depression. That was a deflationary depression, but what most people don't realize is that currency shortages are also an extreme risk, and comes in waves, in a hyperinflationary environment. The fact that you might need much more of the inflated currency to buy the same goods and services doesn't automatically mean that you have more, or that inflated currency is coming to everyone in steadily truckloads (even electronically, nobody's pushing any buttons to make your account grow nominally). It only means that people no longer trust the exchange value stability of the currency, and that those goods and services are no longer priced in response to a typical demand curve--they won't be sold for any less, whether there are any buyers or not.

The one thing local currencies currently lack is any tangible backing that would enable them to be considered a stable store of value. But that is not to say that it is not possible within the realm of what is already established as a matter of precedence. I have been working for some time on a novel design for a special kind of local currency that is 100% backed, as bailment holdings only, of locally vaulted and protected hard commodities (not just gold and silver). I intend to implement that currency as part of a not-for-profit service in New Hampshire communities (starting with one), as part of the Free State Project there. There are a lot of legal issues involved, but none that are insurmountable, and the system I am working on now would most definitely be a legitimate solution to inflationary Fed notes.

If you REALLY want to implement longstanding competing currency - find a local smelter/refiner and begin a project with them to smelt 3 primary metals:

Cooper
Silver
Gold

In various denominations - listed by WEIGHT.

I couldn't agree more. Even if there is no local smelter, and you have to become one. It's not as hard as many might think. The ability for the average person to cheaply and efficiently convert any holdings, including scrap, into currency, is key--an absolute must.

I'm using the following, that I consider the Big Seven:

Precious:
Gold
Silver
Platinum
Palladium

Base:
Copper
Nickel
Aluminum

Each denominated in GRAINS, common units of MASS that are integer convenient to convert from market prices in any other currency (480 grains to a Troy ounce for precious metals, 7000 grains per avoirdupois pound for base metals)

Furthermore, since we live in a tech age - one other business platform that is viable and important: honest holding companies who integrate themselves with various banks and credit card companies.

This way, metal need not be carried around but held in deposit accounts and ownership moved around digitally. No different (COSMETICALLY) then the way the market works now - but simply with a more stable (and HONEST) underpinning.

Of course this also leads (can) to the sequestration of accounts into both savings and deposit accounts. This would allow for interest rates to be locally driven based on the supply of savings that commercial banks and credit unions can attract into their coffers.

This, of course, challenges the entire world order. But ahhhh well - so is the plight of the revolutionary thinker.

Furthermore, since we live in a tech age - one other business platform that is viable and important: honest holding companies who integrate themselves with various banks and credit card companies.

That's actually one of the things I want to defy, at least with my model--an absolute and complete separation of currency issuance from any connection to banking and finance. Not that banking and finance couldn't deal in the currency, mind you--they probably would--but only as another kind of user. And the integration would be handled externally (think BitInstant with the new bank cards it wants to issue for the bitcoins it does not and cannot control).

Fiat currencies could be treated as vehicles only (like a Paypal account that remains empty, but transfers instantly from some other source as needed), with holdings that are the only store of value. Aside from the bank cards, holdings could as easily transferable as Bitcoins (and using similar technology, sans the 'data mining' functions). All with no usury, no demand deposits, no credit, no interest paid out or accepted. A "run" on such a facility would be as much of a concern as a "run" on valet parking, or a coat-check closet at a club.

It was always the mixing and creative blending of mints, banking and finance that has always gotten currencies into deep trouble. Originators (mints, which are not even the original source of the wealth they coin), have vaults and become bailees. Then lenders double as bailees, and circulate their fiduciary media, to the point where promises to pay are deemed every bit as good as payment itself, because the net effect is the same--for a time. So we accept bank notes as the equivalent of hard specie, and that becomes complicated by FRB, demand deposits, fiduciary media and other derivatives, and a whole clusterfuck rat's nest of contradictory counter-party claims, and a lot of unnecessary and complex obfuscation. Unnecessary to the currency holders, that is.

Holding titles originating from a private, independent, community run NON-bank, NON-financial institution, with zero ties to credit, promises, or usury of any kind, would be in a currency class all by itself.

I want a hard-asset backed local currency, with the motto CAVERE FAENERATIO ("avoid usury"), the original source of which is not EVER a bank or financial institution, and which takes no part in fiduciary media of any kind. As Amish in its core foundational principles as it is high tech in its implementation. No glass wall, no assurances, no trust, no MF Global-style promises that bailments won't ever be treated as deposits. None of that is even required, and only because there are no deposits to begin with--only holdings, and only as bailments of private property, not subject (even for an instant) to artificial inflation by any mechanism, contradictory counter-party claims, or promises of any kind.

Disney was once told by a theater-owning friend, "Your problem is that distribution companies don't know what sells until the public tells them what they want." Disney's ultimate response: Buena Vista Distribution. From that standpoint, a currency that is already valued as current money would be treated as a special kind of finished good by banks, but only AFTER the banks observed (as Congress did prior to 1792) what the public actually valued -- an asset that it did not create, cannot counterfeit, and has absolutely no control over whatsoever, beyond whatever notes happen to be its own particular holding titles.

As such, banks could borrow that currency from users, and lend it out at interest. They could even fractionally reserve lend it -- but with its own notes only, not the title notes created by the original core system. Meanwhile, the nominal value of each holding steadily increases relative to the fiat currency. But it's not a fake "peg". It's reflects a real nominal value loss of the currency relative to the underlying assets of each holding. So the local currency itself couldn't be loaned out as a derivative without an equal promise that the derivative will keep pace with the increasing nominal value of the local currency. No bank can fractionally reserve that; it would be a losing proposition for them.

But that does not mean that banks could not profit from a 100% backed lending of holdings. Whatever they are loaning out, however, would have to be the actual tangible holding titles themselves--which are based on percent of metal ownership, not some pegged nominal fiat value. To loan it out, they would have to transfer actual title. Those holding titles would increase in nominal fiat currency value over time, and that increase could then be paid back to the bank in fiat notes as interest.

This way, metal need not be carried around but held in deposit accounts and ownership moved around digitally. No different (COSMETICALLY) then the way the market works now - but simply with a more stable (and HONEST) underpinning.

To make an legal distinction, it is very important to refer to them as "holdings", and avoid the use of the terms "deposit" and "account", which have definitions tied to lending institutions. As to all the rest, you're exactly right. The metal need not be carried around, and in fact COULD BE LEAD OR MERCURY (or even salt!). It weighs the same on paper and electronically, and so long as there is a real market for it, and the underlying assets are really there, there is no reason why it cannot serve as an underpinning for currency.

And the currency itself requires no special printing presses. You print your own currency in any denomination desired.

Verified and authorized at point of sale like any other card.

Of course this also leads (can) to the sequestration of accounts into both savings and deposit accounts. This would allow for interest rates to be locally driven based on the supply of savings that commercial banks and credit unions can attract into their coffers.

With what I'm designing, that will be someone else's concern, independently and absolutely separate from the currency itself. The de facto sequestration occurs naturally because there is no credit/lending/usury arm to the institution to begin with...and never will exist within that institution.

Originally Posted by Tpoints

If your community is small enough, you might as well barter.

Barter is extremely inefficient in any size community. If your community was small enough, and your aim was for a truly local currency, you could measure, weigh, assay, certify, etc., and vault anything from flatware to jewelry to scrap metals of all kinds, the "FUNGIBLE BAILMENT" holding titles of which (all managed electronically) could be theoretically divisible to the atom, and transferable as circulating currency, with underlying assets that are essentially bailed on a more or less permanent basis -- with no in-out privileges. The only way to get at the underlying assets would be a forced dissolution of the entire exchange, in which case the assets would be liquidated en masse, and the proceeds distributed in proportion to private holdings (all of which would be known to the atom).

How would you trade with metals? Say I went to a store with an ounce of silver. The previous day, the closing value was 33 dollars. So, I buy 33 dollars worth of goods. The next day, it goes down to 30 dollars/ounce. Would the merchant lose money from my purchase?

Something like Ithaca Hours isn't. Something like Shire Silver partly is. We need multiple currencies that make it big. So something like Shire Silver needs to make it big. Something like donttreadonmeme needs to make it big. And so on.

How would you trade with metals? Say I went to a store with an ounce of silver. The previous day, the closing value was 33 dollars. So, I buy 33 dollars worth of goods. The next day, it goes down to 30 dollars/ounce. Would the merchant would lose money from my purchase?

That depends on what you count as money. He will still have the full ounce of silver. If you count the fiat currency as the value indicator, and trade directly in silver, the merchant would naturally gain or lose like anyone else, depending on how that metal performed day to day relative to the fiat currency. In a regime where everyone prices everything, including metals, in fed notes, the only thing that is certain is that the value of the Fed notes will continue to fall over time, as reflected in the general prices of metals in those notes, which will continue to rise.

Under the system I am working on now, you could own and trade with silver holdings only (or holdings for any other metal) at any divisible amount, as reckoned in fed dollars. That would be straight forward, and wouldn't have to be an ounce or a coin of any specific denomination. The merchant could still price everything in USD, and you would pay in exact equivalent USD using silver holdings (at fair market value for that day).

Another option, however, is a COMMODITY POOL, with diversified holdings that are far more stable in value (the more commodities there are, the more price stable the pool holdings).

HOW IT WORKS

Let's say you have 1 Troy ounce of silver, and want to add your silver into the local commodity pool.

Here's what an hypothetical pool looks like on the day you add your commodity:

POOL

Mkt Price

$/grain

Wt.

Grains

Value

Value Dist. %

Gold

1715.20

$ 3.57

50.00 oz.

24000.00 gr

$ 85,760

60.61%

Silver

33.66

$ 0.07

500.00 oz.

240000.00 gr

$ 16,830

11.89%

Palladium

663.00

$ 1.38

30.00 oz.

14400.00 gr

$ 19,890

14.06%

Platinum

1607.00

$ 3.35

10.00 oz.

4800.00 gr

$ 16,070

11.36%

Aluminum

0.92

$ 0.0001319

2000.00 lbs.

14000000.00 gr

$ 1,847

1.31%

Copper

7.20

$ 0.0010286

100.00 lbs.

700000.00 gr

$ 720

0.51%

Nickel

7.67

$ 0.0010957

50.00 lbs.

350000.00 gr

$ 384

0.27%

TOTAL POOL:

$ 141,501

100.00%

That's the total pool. Holdings in that pool (for everyone) are based on their locked in percentage of ownership of the total value. That is physically allocated according to the value distribution of each commodity (far right column, total mass times the price of each).

Your silver is priced at USD $33.66 when you add it into the pool. Everyone in the pool agrees to trade the fair market value of your silver for the fair market value of a proportionate percentage of the entire pool. In other words, your one ounce of silver is buying into a lot of different metals, even as a lot of different metals are buying into your one ounce.

This zero-sum game exchange for everyone means that you no longer have one ounce of silver. You end up with the following:

YOUR HOLDINGS

Value Dist.

Grains

oz./lbs

Gold

₴ 20.40

5.7 gr

0.01 oz.

Silver

₴ 4.01

57.2 gr

0.12 oz.

Palladium

₴ 4.73

3.4 gr

0.01 oz.

Platinum

₴ 3.82

1.1 gr

0.00 oz.

Aluminum

₴ 0.44

3329.5 gr

0.48 lbs.

Copper

₴ 0.17

166.5 gr

0.02 lbs.

Nickel

₴ 0.09

83.2 gr

0.01 lbs.

₴ 33.66

TOTAL SHARE:

0.02378221%

VALUE:

₴ 33.66

You now own holdings in gold, silver, palladium, platinum, aluminum, copper and nickel. Your share is now locked in (as a percentage of total pool value), and you are immediately diversified, as are all other holders.

(NOTE: I use the ₴ sign to distinguish holdings from their USD equivalent. It's called the hryvnia sign, and is used by the Ukraine for its currency. All computers have it, and Excel recognizes it as a currency symbol. I like it because it's basically a backwards S with an equal sign running through it)

PRICE OF SILVER FALLS

Now let's say that the price of silver falls to $30 the very next day, as you said. The value of your diversified holding would change to $33.22, not $30. On the upside it works the same way. Let's say that the price of silver (and only silver) changes, this time with an upward swing to $36. The market value of your holdings would only increase to $33.94.

So if you want to speculate, and put your trust in the one metal's performance over all others, stick with a single metal holding. If you want your holding to be more value stable through diversification, insulated and buffered from highs and the lows, you would participate in the pool.

Also note: one thing you cannot do is selectively pull out of a pool (i.e., you can't buy in with silver and extract gold). It's not a gaming and speculation tool, and you would not have the right or the power to "undiversify" everyone else in the pool. It's nothing more than a diversified store of value.

There's a lot more to it, of course, but that's partly it in a nutshell.

EDIT: One more thing. Let's say that you trade with a merchant using a SILVER ONLY holding. The merchant has the option of IMMEDIATELY converting that to a pooled commodity holding, to stabilize its value. But it's a one-way street. You can't convert from a pool to a single metal unless you have someone willing to trade their single metal holding for a pooled holding. That would be a separate exchange, external to the system.

With the advance in technology, Bitcoins will eventually become an easier way to trade.

There are several competing technologies for just every day transactions using your cell phone. Bitcoin is the only one that is a medium of exchange and a currency.

I fully plan on dropping my bank (or just use it to transfer $ to BTC) once the Bitcoin debit card comes out. It will make it so that I can keep my wealth in the Bitcoin currency and still pay for every day things in the local currency.

Definition of political insanity: Voting for the same people expecting different results.

With the advance in technology, Bitcoins will eventually become an easier way to trade.

I LOVE the entire concept of Bitcoins and Bitcoin technology, for reasons that only partly apply to its utility. While I don't think anyone can predict exactly what place Bitcoins will ultimately have, or what other forms it will take, there is no question in my mind but that they are here to stay, and will fill specific needs and take a very valuable place in the overall conglomeration of economies worldwide. It's not going away. As purely a transfer and conveyance mechanism, it's ability to eliminate an oligopoly of middle men bankster controllers and their fees is quite powerful.

While Bitcoins addresses a number of important needs, it is not a panacea. The existence of Microsoft and Apple did not preclude alternative products and applications, or even "sandbox" products that fill niches, like Java, Flash, etc.,. In that regard, the "store of value" aspect of Bitcoins remains a valid question. My focus has always been how to tap into key parts of the Bitcoin concept, and adapt that to a commodity backed local currency in a way that it makes the currency debasement-proof, to every possible degree and extent that it can be on that level.

The current plan involves the use of modified Bitcoin technology (and all equally open source) in the context of a purely local, commodity-backed currency. On a local level there would be central management, but it would be scripted administration, never real control. And "LOCAL" is the only place where any kind of "centralization" (always independent cells of small scale) makes any sense to me at all anyway. The technology would be modified to fit the application, so, for example, since the scarcity component would arise on the basis of real tangible, physical, locally vaulted commodities, there would be no 'data mining' function to it. Your GPU cannot produce currency in this case. But it would be just a rigid in terms of physical allocation (down to every atom accounted for) with no "currency" issued on the basis of promises--past, present or future, and no contradictory or counter-party claims of any kind involved.

Incidentally, when I am ready (and I am not now), if there are any who would like to be involved in this process on any level (whether you just want to be kept posted, give general feedback, or might want to be considered for involvement in development on some level), send me a PM and let me know, and I'll add you to my list.

Steven:
So, basically, it's like a mutual fund. If any one takes a hit, you don't lose your ass.
I remember back in '79 gold went up to like 900 dollars an ounce, but the bubble burst and the price went back down. Can that happen again with the current market?
I was reading that Germany had a strong currency in Hitler's reign. It wasn't backed by gold, but by the people. How did that work?

We need multiple currencies that make it big. So something like Shire Silver needs to make it big. Something like donttreadonmeme needs to make it big. And so on.

I don't think we need to look at it that way. Commodity-based currencies are all inherently fungible. So all that needs to catch on is the concept, whether with one form of currency or many. Actually, it's pretty much automatic that it would be many. But it won't be that they each need to make it big on their own, it would be that they would be the fruit of the general idea of commodity-based currency making it big.

Iím not a libertarian. Iím not advocating everyone run around with no clothes on and smoke pot.

So, basically, it's like a mutual fund. If any one takes a hit, you don't lose your ass.

Yes, but a big difference is that a mutual fund is an investment in activity, with the possibility of a return, whereas this currency promises nothing but the existence of its underlying, privately owned assets, and would pay nothing. It's pure warehousing as bailments, with all holdings losing a fixed percentage of value (actual metal allocations) over time as bailment fees. (0.00002738% per day if the rate is 7/8 of 1% per annum). If you wanted to rent it out to someone at interest that would all be external, privately and individually handled. (banking, credit, finance, etc., will never be mixed with the storage, physical allocation and management of the currency itself).

I remember back in '79 gold went up to like 900 dollars an ounce, but the bubble burst and the price went back down. Can that happen again with the current market?

I would say highly unlikely, but of course it could. A lot of people think precious metals are in a bubble, with a lot of different rationale as to why they believe that. Just not many here, as this place is chock full of metalbugs (yours truly included).

If you look at the long term, however, all the short turn ups and downs average out into an exponential curve that becomes undeniable and self evident. It has less to do with the exchange value of the PM as it does the loss of exchange value of the exponentially inflated fiat currency it's priced in. So if you're talking long term, not a chance. Not unless you're betting that the fiat currency supply is going to be choked. If that was ever the case, the price of gold would go down--for anyone with two dimes to rub together (read=hardly anyone)--in the midst of a massive deflationary depression where the entire Ponzi economy is catastrophically full of defaults and wrecked for a time.

I was reading that Germany had a strong currency in Hitler's reign. It wasn't backed by gold, but by the people. How did that work?

By following a Keynesian policy (which Keynes himself viewed with favor at the time), by tying the fiat currency to promises that increased the national debt. Hitler appointed a man named Hjalmar Schacht to be the Reichsbank President in 1933, and together they created Germany's then-version of a deficit spending Ponzi scheme economy, with Germany's new Bills of Exchange. Unlike Fed dollars, that earn nothing, Germany's Bills of Credit circulated like Treasury bills circulating as currency. They were like Lincoln's greenbacks, in that they were a fiat currency printed out of thin air, but instead of promises to later pay in gold, Germany's bills promised to pay 4% interest (in that fiat currency, of course).

What many defenders of this scheme fail to acknowledge (or realize) is that any Ponzi economy, as this one was, can start out with a strong boom, with everyone believing in its magical powers to "create" wealth out of thin air and belief. But then the realities of its fundamentals kick in, and it ultimately ends in a bust. For Germany, there was a bust that covered that inevitable bust in the form of Germany's defeat in WWII.

Furthermore, since we live in a tech age - one other business platform that is viable and important: honest holding companies who integrate themselves with various banks and credit card companies.

This way, metal need not be carried around but held in deposit accounts and ownership moved around digitally. No different (COSMETICALLY) then the way the market works now - but simply with a more stable (and HONEST) underpinning.

Of course this also leads (can) to the sequestration of accounts into both savings and deposit accounts. This would allow for interest rates to be locally driven based on the supply of savings that commercial banks and credit unions can attract into their coffers.

This, of course, challenges the entire world order. But ahhhh well - so is the plight of the revolutionary thinker.

We simply need SEVERAL competing currencies. Some digital or paper against holdings others just solid precious metals. We can have quite a variety and let the "market" decide which ones will be successful. Personally I think we need to get back to currency being cumbersome for quite some time until any of us are going to trust a "system" we can't see, touch or feel run by strangers far away. I think credit lines with stores, merchants, utilities etc are fine and can take care of most of our transactional spending but should be paid in hard PM currency.

The most important thing is we let the FED and their fractional reserve banking go off on their own. If anyone wants to deal with them then fine but the rest of us need several options.

We definitely need to make sure every " of currency that goes into the stockmarket is transfered out of US dollars and into a completely backed currency. This crap of creating money out of thin air then multiplying it by 10 crap is for the birds. They play the stockmarket like a slot machine using worthless slugs.

To me letting strangers hold or manage my currency is as logical as letting them hold or manage my children. The essence of the entire thing will just never work out for very long before there are problems. They are simply too easily corrupted and too hard to keep secured.

Personally I think we need to get back to currency being cumbersome for quite some time until any of us are going to trust a "system" we can't see, touch or feel run by strangers far away.

You hit on two keys there:

"...we can't see, touch or feel..."
"...run by strangers far away..."

There is something to be said, I think, for a small committed group willing to circle the wagons in defense of one another's property--in addition to their own. That's what I want to put to the test in a way that I don't think has ever been tested before.

Yes, but a big difference is that a mutual fund is an investment in activity, with the possibility of a return, whereas this currency promises nothing but the existence of its underlying, privately owned assets, and would pay nothing. It's pure warehousing as bailments, with all holdings losing a fixed percentage of value (actual metal allocations) over time as bailment fees. (0.00002738% per day if the rate is 7/8 of 1% per annum). If you wanted to rent it out to someone at interest that would all be external, privately and individually handled. (banking, credit, finance, etc., will never be mixed with the storage, physical allocation and management of the currency itself).

I would say highly unlikely, but of course it could. A lot of people think precious metals are in a bubble, with a lot of different rationale as to why they believe that. Just not many here, as this place is chock full of metalbugs (yours truly included).

If you look at the long term, however, all the short turn ups and downs average out into an exponential curve that becomes undeniable and self evident. It has less to do with the exchange value of the PM as it does the loss of exchange value of the exponentially inflated fiat currency it's priced in. So if you're talking long term, not a chance. Not unless you're betting that the fiat currency supply is going to be choked. If that was ever the case, the price of gold would go down--for anyone with two dimes to rub together (read=hardly anyone)--in the midst of a massive deflationary depression where the entire Ponzi economy is catastrophically full of defaults and wrecked for a time.

By following a Keynesian policy (which Keynes himself viewed with favor at the time), by tying the fiat currency to promises that increased the national debt. Hitler appointed a man named Hjalmar Schacht to be the Reichsbank President in 1933, and together they created Germany's then-version of a deficit spending Ponzi scheme economy, with Germany's new Bills of Exchange. Unlike Fed dollars, that earn nothing, Germany's Bills of Credit circulated like Treasury bills circulating as currency. They were like Lincoln's greenbacks, in that they were a fiat currency printed out of thin air, but instead of promises to later pay in gold, Germany's bills promised to pay 4% interest (in that fiat currency, of course).

What many defenders of this scheme fail to acknowledge (or realize) is that any Ponzi economy, as this one was, can start out with a strong boom, with everyone believing in its magical powers to "create" wealth out of thin air and belief. But then the realities of its fundamentals kick in, and it ultimately ends in a bust. For Germany, there was a bust that covered that inevitable bust in the form of Germany's defeat in WWII.

Well, that explains it. It was about the same thing we have here. What about the Confederacy? We had different currencies in each state. How would that work? We know it didn't then b/c of the loss of the war. But, is it a feasible currency option?

Well, that explains it. It was about the same thing we have here. What about the Confederacy? We had different currencies in each state. How would that work? We know it didn't then b/c of the loss of the war. But, is it a feasible currency option?

Should states even be involved in currency at all?

If they are involved, then what exactly should the state do, beyond simply having a policy of what currency it uses in its own transactions? Did those states have legal tender laws? If so, that might be more of the cause of their problems than multiple currencies. If the currencies are all commodity-based, and none of them are given a legal monopoly status, then they'll be interchangeable, and people, wherever they live, will choose to use the currencies that are most widely accepted and trustworthy when exchanging them for metals.

Iím not a libertarian. Iím not advocating everyone run around with no clothes on and smoke pot.

To anyone that sent me a PM and didn't get a reply, check your inbox, it's full! Small quota on this system, and I can't send a reply.

Originally Posted by BAllen

Well, that explains it. It was about the same thing we have here. What about the Confederacy? We had different currencies in each state. How would that work? We know it didn't then b/c of the loss of the war. But, is it a feasible currency option?

That's the whole historically misapplied point of a "standard". It's just intended as a convenience, to make trade more efficient, with UNITS that can be referred to that relate to a commonly traded weight and purity for a given UNIT.

If everyone is following the same standard, the flow of trade is supposedly made more efficient, as we all refer to the same predictable UNITS. Fortunately, we have all the standards we need. We didn't ever need EAGLES, DOLLARS and CENTS in the first place, except perhaps as a branding mechanism, to distinguish them from other currencies. Troy ounces and grains (or any other metric) were always sufficient. The problem (for currency debasers only) is that you can't change a Troy ounce (or a gallon or an inch) into something else. Unless your Great Britain and you start with a thing called a POUND STERLING, and it ends up eventually having a meaning that has NOTHING to do with its original.

As for actual standards of weights and measures, we have evolved, and have all that down pat now. There is no problem with transporting and trading gallons of milk across state lines, or even deciding to package and measure them as liters, and going back and forth between the two. A gallon is a gallon, and a liter is a liter, and everyone knows what they are, and it's easy enough to convert between the two.

We're not in Confederate times, and technology has all but eliminated many of the former problems of currency inefficiency. Go to pay with gold and/or silver junk coins to someone who accepts it regularly as payment, and watch what they do. They won't count the coins. They won't bite them, or examine the ridges. They'll pull out an electronic scale, and calculate the PM contents for themselves. And for many you can pay in jewelry and flatware, and once they know that it's genuine (quick acid tests) they'll do the same with that.

Originally Posted by erowe1

Should states even be involved in currency at all?

If they are involved, then what exactly should the state do, beyond simply having a policy of what currency it uses in its own transactions?

That, and whatever the courts will "make" currency by default in adjudication, absent specific tenable terms in a contract that declares otherwise. Constitutionally that is nothing but gold and silver coin. But all states disregard the Constitution on that little explicitly stated sticking point. Beyond that, there is no need for state involvement. What private parties choose to use as current money is between those two parties alone, and ostensibly voluntary on both parts, with the state NOT a party of interest.

If they are involved, then what exactly should the state do, beyond simply having a policy of what currency it uses in its own transactions? Did those states have legal tender laws? If so, that might be more of the cause of their problems than multiple currencies. If the currencies are all commodity-based, and none of them are given a legal monopoly status, then they'll be interchangeable, and people, wherever they live, will choose to use the currencies that are most widely accepted and trustworthy when exchanging them for metals.

With the current technology available "paper" currency is simply WAY too easy to counterfeit. That is just with domestic crooks but the largest problem you have is international crooks and foreign governments counterfeiting the currency. We constantly find tens of millions and even billions in counterfeited currency and Treasury Bonds overseas.

We are on the absolute very last leg of using paper or digital currency at all. They are both so easily corrupted/counterfeited a couple teenagers could do it. Current paper reproduction and digital security breaching technology is simply too cheap and easily attainable. You have to remember the Federal Reserve and World Bank crooks have trillions in real estate, corporations, stocks, PM's etc etc etc. These people are global terrorists and crooks beyond anything the innocent sheeple of this country could comprehend.

I mean these people will invade a country, assassinate its leaders and slaughter 600,000 civilians to keep a small middle eastern government using the US Dollar for oil transactions. What chance do you think a paper or digital currency stands against these human holocausts? I have no doubt these people will resort to heinous crimes beyond our comprehension to get back into power.

No thanks.... the paper and digital crap is playing right into their hands. We have to K.I.S.S..... keep it simple stupid. Drag around and hide PM's or such and have monthly types of credit lines for daily and monthly type transactional business. They are simply not going to go digging up backyards and beating open safes but the second you "CENTRALIZE" anything they are on it like a dog on a bone. At this point only a complete fool would centralize any currency competing with the FED bankers. They would "eat your liver with some fava beans and a nice chianti".

It is imperative to TOTALLY decentralize the "payment of goods/services" situation with multiple tangible transactional commodities. If one becomes unstable we simply move to another one. The damage is minimized.

Good point about paper money. However, gold standard can be just as crooked. In earlier times, nations would plunder another's wealth just to get their gold, so they could create more money to expand their empires. England used fractional reserve banking in the 1600's, so they could expand the economy without having to do that.
Ron Paul did make a good point on a talk show one night when gas went up to about $4.00/gallon. He said he could get it down to a dime a gallon. The host asked how, he said: How much is an old silver dime worth? About $4. So there is stability with pm currency. I heard of one company that paid its employees with pm coins. They reported the face value to the IRS, so they didn't show much income to pay taxes on.

I LOVE the entire concept of Bitcoins and Bitcoin technology, for reasons that only partly apply to its utility. While I don't think anyone can predict exactly what place Bitcoins will ultimately have, or what other forms it will take, there is no question in my mind but that they are here to stay, and will fill specific needs and take a very valuable place in the overall conglomeration of economies worldwide. It's not going away. As purely a transfer and conveyance mechanism, it's ability to eliminate an oligopoly of middle men bankster controllers and their fees is quite powerful.

While Bitcoins addresses a number of important needs, it is not a panacea. The existence of Microsoft and Apple did not preclude alternative products and applications, or even "sandbox" products that fill niches, like Java, Flash, etc.,. In that regard, the "store of value" aspect of Bitcoins remains a valid question. My focus has always been how to tap into key parts of the Bitcoin concept, and adapt that to a commodity backed local currency in a way that it makes the currency debasement-proof, to every possible degree and extent that it can be on that level.

The current plan involves the use of modified Bitcoin technology (and all equally open source) in the context of a purely local, commodity-backed currency. On a local level there would be central management, but it would be scripted administration, never real control. And "LOCAL" is the only place where any kind of "centralization" (always independent cells of small scale) makes any sense to me at all anyway. The technology would be modified to fit the application, so, for example, since the scarcity component would arise on the basis of real tangible, physical, locally vaulted commodities, there would be no 'data mining' function to it. Your GPU cannot produce currency in this case. But it would be just a rigid in terms of physical allocation (down to every atom accounted for) with no "currency" issued on the basis of promises--past, present or future, and no contradictory or counter-party claims of any kind involved.

You could get local merchants to accept a local currency "backed" by Bitcoin. Just create an alternative client or app that uses the Bitcoin blockchain but has the local logo or currency name. I spoke to the guys at bitpay who said that they may be able to create a sort of "gift card" that has Bitcoin value behind it. There are also printable bitcoin bills and bitcoin coins that could be traded.

If the local merchants all accept it and use it, then it would thrive as a local currency. There is a guy in Berlin working to get several restaurants and stores to accept Bitcoin, he has 4 so far.

Definition of political insanity: Voting for the same people expecting different results.